March 8, 2019 / 7:31 AM / 6 months ago

Breakingviews - Hong Kong bank showcases the XX factor

Chief Secretary for Administration Carrie Lam Cheng Yuet-ngor (3rd R) stands beside other officials during a news conference to announce the new team of principal officials appointed in Hong Kong June 28, 2012, ahead of the 15th anniversary of the territory's transfer from British rule to China on July 1. REUTERS/Tyrone Siu (CHINA - Tags: POLITICS)

HONG KONG (Reuters Breakingviews) - Hong Kong is home to an unlikely champion of gender equality. Even as more disappointing statistics about corporate diversity roll in this International Women’s Day, the venerable Hang Seng Bank can stand proud. Its shares have outperformed under three consecutive female chief executives and a cohort of female directors. A no-nonsense approach sets a strong example for companies everywhere.

Efforts to achieve a better balance in the working world, especially at the highest levels, have been a slog. Female representation in boardrooms is ticking up, but slowly. Roughly one in five directors across the Fortune 1000 were women last year. And only around 5 percent of CEOs of S&P 500 and FTSE 100 constituents have two X chromosomes. 

There is an even longer way to go in Hong Kong. Among the 50 members of the city’s Hang Seng Index, just 13.9 percent directors were women at the beginning of the year, up a measly 0.1 percentage point from 2018, according to research released on Thursday by non-profit advocacy group Community Business. Among those companies, Hang Seng Bank had the highest proportion of women on the board – at 38.5 percent – and is the only one with a female boss.

Louisa Cheang became CEO in 2017, following Rose Lee and Margaret Leung, who served in the role from 2012 and 2009, respectively. The 86-year-old bank credits pragmatism more than any specific policy. Senior leaders argue that an efficient meritocracy doesn’t discriminate, and promoting the most talented individuals is good for business.

There are no quotas or any other formal schemes to support female executives at the $46 billion financial institution, but women at the top make for highly visible role models, says Chairman Raymond Ch’ien. This is among the most essential factors for working women. Irene Lee, a boardroom veteran, also emphasises the business case: women in Asia gaining wealth and influence want executives who understand their priorities.

Hang Seng Bank’s enlightened approach caters to shareholders as much as clients. Its annualised total shareholder return over roughly the last decade was 12.4 percent, exceeding the performance of local financial stocks and the benchmark index. All told, the bank has much to envy, and emulate.

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